What's good for the BC Liberals may not be good for BC Hydro

One of the last things anyone would ever imagine the B.C. government doing is adopting an old NDP program, but that's exactly what Energy and Mines Minister Bill Bennett did this month when he announced a five-year, $300 million hydro bill deferment plan for 13 B.C. mines owned by six companies.

Never mind that BC Hydro is grappling with its own deferral problems to the tune of $5 billion.

Make no mistake, there's a price to pay when BC Hydro becomes a political arm of government. The intertwining of self-interests gets complicated, and the interests of ratepayers can take a backseat to political interests.

According to the Financial Post, Teck Resources “has more than US$3.5 billion of debt coming due between 2017 and 2023 and lost its investment-grade credit rating last year.”

Taseko Mines, “has more than $260 million of senior notes coming due in 2019, while a US$30 million secured loan matures this May.”

It seems like only yesterday that the company sent Bennett off to lobby Ottawa on its behalf.

In January 2014, Bennett spent a day on Parliament Hill meeting with Natural Resources minister Joe Oliver and Industry minister James Moore to make Taseko's case for its controversial New Prosperity copper and gold project.

By then copper prices had already fallen 27.5 per cent off their 2011 high.

Imperial Metals owns three of the 13 mines in Bennett's deal, including Mount Polley, Red Chris and Huckleberry. In 2004, the government quietly forgave $3 million in liabilities owed it by Huckleberry Mine.

From 2005 to 2014, the six companies donated $2.8 million to the party. Key executives kicked-in another $380,000.

Three of the six companies donated $97,010 to the NDP, $75,300 of it in 2013.

BC Hydro's contractual obligations with private power producers have ballooned from $22.25 billion in 2009 for “2010 and beyond” to $56.2 billion for “2016 and beyond.”

It's the gift that keeps on giving for everyone involved, except ratepayers.

In a 2008 call for independent power projects, 75 proponents registered with BC Hydro.

Forty-three submitted proposals and, in 2010, BC Hydro signed purchase agreements with 18 of the proponents.

From July 1, 2008 to September 30, 2010 — when B.C. Hydro was making its decisions — 14 proponents donated $268,461 to the Liberals. One donated $1,000 to the NDP.

Ten of the 14 signed purchase agreements with BC Hydro. One of the 14 who didn't, never donated again.

Their before and after donations are interesting too.

For the 10 successful proponents, their donations more than doubled from $112,801 (January 2005 to June 2008) to $229,471.

After the deals were done, they settled back again. Seven donated $112,345 to the Liberals and five gave $16,225 to the NDP (2010 to 2014).

In 2008, the Mining Association of B.C. received a $295,188 grant from the Northern Development Initiative Trust (NDIT) to make the business case for the Northwest Transmission Line.

In turn, the association hired Australia-based Macquarie Bank to “determine the threshold of economic activity that would be required to make the construction of the (line) an economically viable infrastructure project.”

Excluding the six companies in Bennett's deferral program, independent power producers and those identified by BC Hydro as “potential future mines” for the transmission line, three trade associations and ten of the companies donated $962,220 to the Liberals and $10,320 to the NDP.

Macquarie has donated $17,050 to the Liberals.

The $404 million transmission line overshot its budget by more than $300 million, with a final price tag of $716 million. But who counts bills among friends?

There are the nine “potential future mines” that BC Hydro hopes will one day connect to the line.

With the downturn in metal prices, BC Hydro shouldn't hold its breath in anticipation.

One of the founding directors of Copper Fox Metals is Hector Mackay-Dunn, who co-chaired the BC Liberal's 2009 election preparation efforts.

MacKay-Dunn is affectionately known in some party circles as Hector the Collector for his prowess at political fundraising.

The nine companies behind the potential mines have donated $1 million to the Liberals and $18,050 to the NDP ($10,000 of it from Copper Fox in 2013).

And at the same time the government was imposing hydro rate increases on schools and hospitals in 2014, Bennett announced a $100 million BC Hydro initiative for pulp and paper producers to “support investments in more energy efficient equipment.”

The forest industry has donated more than $4.2 million to the Liberals and $294,905 to the NDP.

Tidy haul.

Add it all up: more than $9.8 million in donations from interested parties to the Liberals and $417,185 to the NDP, not including their 2015 donations.

Guess who gets saddled with the bill?

Including operating and capital development agreements that have tripled to $3.3 billion since 2010, BC Hydro's contractual obligations now stand at $59.7 billion, not including their debt which has grown from $6.8 billion in 2004 to $16.7 billion last year.

They've had to borrow $3.2 billion just to turn around and give it to the B.C. government as so-called dividends.

Meanwhile, Hydro-Quebec cut a dividend cheque of $2.5 billion for the Quebec government in 2014.

They didn't have to borrow money to cover the cheque and still had $700 million in profits left over.

In 2014, it's rates were nearly two cents per kWh lower than B.C. From 2007 to 2015, its cumulative rate increase was 17.1. In B.C., it was 63.2 per cent.

Total donations from all of Hydro-Quebec's suppliers and contractors to the Parti Quebecois and the Quebec Liberal party in the last 30-years? Zero.

Quebec bans corporate and union donations. The maximum any Quebec resident can give to a political party is $100 annually.

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“Hydro’s demand forecasts are persistently and systematically wrong. There is no reason to believe that much new power, if any, will be required in the next 20 to 30 years. But if there is, there are several alternatives available which are markedly less expensive and less damaging to Aboriginal interests, fisheries and the environment generally, than Site C.”

Those are the words of Harry Swain, who chaired the review of the Site C dam, in an affidavit filed in federal court this week.